The worlds biggest gas exporters will benefit from Japans increased need for liquefied natural gas (LNG), but the global gas glut that has weighed them down over recent years is unlikely to shrink significantly.Japans worst recorded earthquake and tsunami, last Friday, shut four nuclear power plants and threatens to keep at least one closed forever, driving up LNG demand for years to come.Russia, the worlds biggest gas exporter, and Qatar, the worlds biggest LNG exporter, are ready and able to supply Japan with more LNG.Since the quake hit, shares in British LNG giant BG Group, which, just days before, finalised a 20-year supply deal with Tokyo Gas, starting in 2015, have jumped over seven per cent while the FTSE-100 has fallen.French bank, Societe Generale, estimates extra Japanese demand at five billion cubic metres (bcm) this year and remaining at two bcm above pre-quake levels of around 88 bcm for years to come.But that increase will make little difference to a global gas market that the International Energy Agency had said could be oversupplied by 200 bcm.If SocGens prediction that about half of Japans loss in nuclear capacity from Fridays quake will be replaced by gas is correct, it would need delivery of about one extra tanker carrying 145,000 cubic metres of LNG a week to meet it. These are very small volumes compared to the supply that is available at the moment. So, it will have a slight impact, but it will not put pressure on the market, said Carlos Torres, a senior gas analyst at Point Carbon, a Thomson Reuters company.Qatar would definitely have the capacity to supply these volumes without any problem. Due to the geographic proximity of Malaysia, Russia and Australia, these could be logical supply sources also.Russia said it could offer only about 200,000 tonnes more LNG, equal to about 0.25 bcm of gas, from its nearby Sakhalin export plant to Japan.I do not think that in current circumstances Russia has capacity to increase in the near term supplies of LNG from its Sakhalin-2 project, said Valery Nesterov, an oil and gas analyst Troika Dialog in Moscow.But Qatar has been gobbling up Russias market in Europe, and if Qatar sends tankers east, Russian gas export monopoly Gazprom could claw back some sales in Europe, its biggest market. Two huge Qatari LNG production lines, which have opened since late 2010, are capable of producing 7.8 million tonnes a year, or nearly 10 bcm a year of gas eachfour times SocGens estimate for Japans incremental demand this year. Some of that extra output is likely to land in Europe.In 2007, an earthquake shut down Japans biggest nuclear power plant with a capacity nearly as large as that shut by the latest disaster. The resulting rise in Japanese gas demand caused an LNG spot price surge above $20 per million British thermal units (mmBtu).But a boom in U.S. shale gas production over the past two years has changed the global market from one of tight supply and sky-high prices to plentiful supply and relatively cheap gas.
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